Home ownership losing popularity

Home ownership is at its lowest rate in this millennium.  In the meantime, rent levels are climbing faster than a scared squirrel.  It would seem that this is a perfect scenario for large masses of first time home buyers stampeding toward every home with a for sale sign in the front yard.  But, that's not what's happening.

The choice to remain a non-buyer is a popular one, and there are many reasons.  Some folks make the choice simply because the down payment requirement creates a barrier to their paycheck to paycheck financial plan, and that's probably a good thing.  If you can't afford the down payment, you probably can't afford to own a home -- or can you?  Rent payments are higher than many home loan payments plus other owning expenses, so there may be a case to be made for lower entry requirements for a home loan.

Sometimes, debt levels are too high, and they will remain too high to qualify for home acquisition financing.  As most of us know, there is a large number of people who have a college bill that will be with them for many years to come.  They are just plain out of the market, like it or not.

There are also many folks who simply need the flexibility to remain mobile for career reasons.  They want to remain "free' to chase dollars across the country or even around the world.  I pity them. 

There has always been a slice of society that prefers having someone else take care of maintenance and repairs, and someone else providing amenities that they enjoy.  There is a related time commitment that comes with home ownership that lowers its attractiveness.  The industry has responded somewhat to this preference with both free standing houses and condo-townhouse developments which include exterior maintenance and amenities similar to luxury rentals.  Things like pools, exercise facilities, etc. are often part of both rental property and association tied owned homes.  It's an acceptable compromise for some people.

Home ownership levels will rise as the cost differential moves substantially further in the direction of owning over renting.  My guess is that it will be at the least several more years before there is a meaningful increase.